What an atlas is for
Every separate image a game draws costs the graphics card a change of texture. Packing many sprites into one image, the atlas, lets the engine draw them together, which runs faster and loads quicker than a hundred small files.
The packer fits sprites of different sizes together like a jigsaw, largest first, and writes down where each one ended up. Sprites are never rotated or scaled, so they look exactly as you drew them.